Savills sees sharp increase in profits

SHARES in property group Savills rose sharply today after it said trading in the second half of the year had been better than expected.

The company put investors on stand-by for profits ?materially‘ ahead of market expectations after benefiting from an improvement in economic confidence.

It added there had been little impact so far from the first rise in UK interest rates for almost four years. Shares surged more than 15% following the trading update, taking shares 37p higher to 292 1/2p.

Analysts had been expecting full-year profits to remain little changed at £24m, although this figure will now be revised.

London-based Savills also promised a significantly increased final dividend because of the strong performance and level of cash balances.

Two months ago Savills announced 8% lower half-year profits after business was affected by the Iraq war and uncertainty in financial markets.

According to Savills, trading conditions have ?generally improved‘ with a strong recovery in activity levels in the prime residential market following a slow start to the year.

It added: ?Sales of new homes have also increased with continuing interest from investors.‘

Savills has a network of 47 branches in the UK, while its FPDSavills arm sells and lets residential property worldwide. It employs nearly 13,000 people worldwide, and has slightly more than 2,000 staff in the UK.